Amex report: Transatlantic travel continues to cost dear
According to the latest American Express European Corporate Travel Index, European business travellers are still paying a high price to travel to North America, despite the crisis in the airline industry following 11 September.
Average fares from Western Europe to North America climbed 2.1%, 3.4% and 4.6% quarter-on-quarter in Economy, Business and First Class respectively, bringing year-on-year increases for those fare bands to a total of 7.7%, 7.9% and 8.1% respectively.
However, fares to destinations within Western Europe are beginning to show signs of stabilising, as the increased competition from both low cost airlines and rail travel start to take effect, but have still posted considerable year-on-year increases. Restricted Business and Business Class fares increased 2.6% and 2.5% respectively, bringing year-on-year increases to 8.3% and 6.5%, while Economy Class fares actually fell 0.4% quarter on quarter, although still showed a considerable increase year on year of 8.6%.
UK, Netherlands and Germany experienced the biggest increases in Business Class fares rising 5.1%, 4.8% and 4.1% respectively quarter-on-quarter, bringing year-on-year increases to 8.2%, 7.3% and 9.4% respectively.
By contrast, Leisure fares to North America showed mixed trends with some countries posting dramatic increases, such as France, Italy, and Spain with increases of 15.5%, 7.3% and 6.5% respectively, while others showed more moderate movement, with some countries even posting decreases for the year. Leisure fares from the UK to North America increased 1.9% year-on-year while the same fare band fell for Sweden, the Netherlands and Germany by 18.8%, 9.4% and 4.5% respectively.
Average fare changes from Europe, Q3-Q4 in %
|
Economy |
Restricted Business |
Business |
Restric’d First |
First |
Restricted Supersonic |
Super- |
|
|
North America |
2.1 |
4.6 |
3.4 |
4.5 |
4.6 |
7.4 |
9.0 |
|
Western Europe |
-0.4 |
2.5 |
2.4 |
Commenting on these trends, Matthew Davis, Director Consulting Services, American Express said: “Although the underlying published fares to North America have gone up, this belies the reality of the situation. Airlines are using promotional fares and two for one offers to try and fill seats, while cutting capacity on certain routes to balance out supply and demand. However, the restrictions imposed on promotional fares can result in only a limited number of seats or certain flights available at these reduced prices, which means they are not always appropriate for the business traveller who often requires greater flexibility. And of course, when these promotions disappear, the business traveller will end up paying considerably more than before.”
Mr Davis added: “It is noteworthy that, on the whole, fares to North America are increasing at a much greater rate than those to Western Europe. With few airlines operating on these popular and premium routes, and with the ‘open skies’ negotiations between the UK and the US stalling, this will continue to be the case for the foreseeable future. By contrast, airlines flying to Western European destinations are facing ever increasing competition on these routes – alongside the low cost airlines, travellers are now being lured away from traditional airlines by the convenience and value for money offered by train travel. Companies are becoming much more savvy about utilising lower cost alternatives to either complete a segment, or even the entirety, of their journey where these are available.”
Train fares v Airfares for different destinations in Europe (Q4 2001)
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